How does the US affiliate market differ from the UK? - Q&A

The main similarites or differences between Europe and the USA in an affiliate marketing sense are often debated. Some of these discussions are well-founded while others are conjecture-filled. So A4u decided to poll two key industry representatives from across the pond in an effort to separate fact from supposition. Geno Prussakov is founder of AM Navigator and Affiliate Management Days, whereas Jennifer Hoffman is the US General Manager of 7thingsmedia. Read on to discover their thoughts on the Euro/US divide.

Affiliate Marketing is known to be different in approach between the US and Europe. What would you say were the main differences?

Unlike in the UK, in the U.S. we worry who's going to be the next state to implement the "affiliate nexus" tax, and wonder how soon a federal solution will put an end to the so-called "Amazon tax" mess? We also seem to have fewer networks/platforms who are actively exploring attribution modeling. Thirdly, the major players are somewhat different too. Zanox/Affiliate Window and TradeDoubler who are really strong in the U.K. are hardly visible here in the U.S. where LinkShare, Commission Junction, Google Affiliate Network, and ShareASale support most of the network-based programs out there. Finally, in the UK, you have IAB's Affiliate Marketing Council (AMC), which helps regulate many important things. Here in the U.S. we could really learn from what the AMC is doing in Britain.

As a whole it is more similar than people think, true, there are differences but in theory and practice the job of an affiliate manager is very similar. Building relationships, pushing for coverage and getting buy in from the brand are the same, it's just the volume that changes. The US is - as commonly quoted - 10 times the size so with a bigger market there isn't the demand for intricacies as there is in the UK – in the UK affiliate managers and brands are squeezing every avenue possible to gain coverage and sales, US brands can get away with being less specific.

Both are thriving, however both have their own challenges, for example, the impacts of the affiliate Nexus tax in the US and the potential implications of the Privacy Directive in the EU.

One definite stand out difference I have found however is the price! Affiliates in the US are commonly as much about tenancy and launch fees (starting at $5,000 - $10,000) as they are pure CPA. Plus to attend Events in the US are considerably more than their EU or UK counterparts.

How are you expecting the Affiliate landscape to change across the US and Europe in 2012, if at all?

GP: Can't speak much for Europe, but in the US, with the wider adoption of social and mobile, I expect wider affiliate penetration into these two channels. We will also have more structured affiliate management education introduced in the US, Affiliate Management Days, of course, being one of the opportunities that I'm thinking here. More attention will also be paid to testing and optimisation (of landing pages, creatives, promos, etc). More advertisers will also turn to pay-per-call. And, finally, with the solutions that companies like HasOffers and Impact Radius are offering and promoting, I do expect that many more merchants will look in the direction of multi-touchpoint attribution.

JH: Across the whole I don't think the landscape will change a huge amount, the main trends we have seen in the past year will still be as apparent in 2012 and the industry can only continue to mature and thrive.

A particularly large trend we see in both the UK and US, which I only predict to continue is the growth of brands, especially SME's, fully realising the potential of affiliate marketing and prioritising resource to maximise this. They'll therefore not just see the channel as an Ecommerce tick box but one worthy of in-house resource or agency support.

Due to the entrepreneurial nature of the affiliate channel, new technologies will always continue to be tried and tested in this landscape – whilst larger brands / early adopters are aware of the opportunities of the likes of re-targeting and wider attribution models, there is still a long way to go before this is the majority!

Skimlinks, friends of the agency, are storming through the UK and US, however we are still introducing such tools across both sides of the pond in our various publisher/brand events.

Naturally another trend which will continue to grow throughout 2012 in the US and Europe is the launch of m-commerce and mobile tracking abilities as the use of mobile devices for online shopping increases. This views is also supported by various recent studies.

Within the EU, the Privacy law conversations will continue as brands, agencies, networks and affiliates try to understand and act on the the interpretation of the legislation.

There is a surge in UK Affiliates creating more direct partnerships with their advertisers/agencies. What can we learn from the US approach to direct communication?

GP: I don't know if there is such a thing as a universally-accepted and widely-practiced "US approach to direct communication"; but I personally like to view a healthy affiliate (and any business) communication channel through the framework of these 7 Rs:

Reachable — approachable and easy to contact

Responsive — not only listening, but hearing

Real — sincere, authentic and not wearing a mask

Realistic — aware of things as they are and transferring this awareness onto everything from estimates to goals and expectations

Responsible — liable to be called on to answer, even if the only person he/she is accountable to is him/herself

Reflective — able of pause and reflect on yourself, as well as capable of producing reflection in followers

Resonating — deeply empathetic towards followers, and capable of identifying with their feelings, needs, and emotions

JH: Again it's all about volume and quality of service. The US is a lot more commoditised so there's significantly less loyalty to the big affiliate networks, and the marketplace is somewhat fragmented.

The problems we see is that this can cause issues from both a quality and sales point of view. Brands and affiliates need to understand that there needs to be sound commercial terms for all parties to receive fair profit – whether that's the affiliate, the network or the agency! The most effective campaigns occur when all parties treat and respect each other equally.

Networks are getting a hard time at the minute and maybe they need to review their key USP's and ensure the advertiser and publishers are aware of their benefits – both short and long term.

When done correctly, either in-house or via an agency/network, the closer communication relationships with affiliates drive greater control over the correct marketing message, fuller promotions and as a result more loyal affiliates. All this creates a strong overall program performance and a brand ambassador mentality with publishers.

It seems the US has a high number of 'lead-based' affiliates in its grasp, whereas the UK works with more 'niche' affiliates. Why do you think this is?

GP: If we exclude the so-called "CPA networks" from the list (and we probably should, since most of them aren't characteristic of the overall industry), then I don't know if most affiliates will end up falling into the "lead-based" category. I would think that CPS and niche affiliates will actually end up holding a significant share of the affiliate market in the U.S. as well.

JH: A number of influential brands have and continue to be burnt with lead generation campaigns which has had a significantly detrimental impact on on the perception of the channel as a whole.

We find due to the distrust brands have within the UK of lead generation, they are less willing to allocate meaningful budget.

That isn't necessarily replicated in the US and lead generation has a cleaner place within Ecommerce and has a far greater reason for being. As a whole there is a bigger pot to delve in to and therefore a much bigger prize to be had – a brand in the UK with 50 stores will be known throughout the entire country however, a brand in the US with only 50 stores in a state would only be recognised in that state alone! Therefore the channel has a greater need to continue growing brands and enticing new customers.

As lead generation is more common practice in the US, most brands have much more robust back-end systems to allow them the ability to scrutinise quality leads and then effectively up-sell a looker into a booker!

What advice can you give to affiliates who are looking to increase their commissions in the US?

Simon Holland

Simon is the news and research reporter at Existem. Previously a technology journalist, he now spends his time investigating both future and developing trends in performance marketing whilst producing editorial content for performancein.com.